Many consumers today prefer the convenience of using a payment card such as a credit card or debit card rather than cash to pay for POS transactions. With sufficient credit limits or account balances, busy consumers are assured of having access to adequate funds to make as many purchases as they may need to make within a day, a week, a month, etc. In some instances, consumers may purchase more items than they intended simply because the payment card provides the means to do so. The cards obviate the need to carry cash or even determine how much cash might be needed when visiting a particular retail establishment. Furthermore, the cards offer consumers protection if lost or stolen.
In response to consumer preferences to use payment cards, most merchants today are willing to accept cards even though they may be charged fees for accepting such types of payments. The increased spending power provided by payment cards may result in higher per visit charges that offset the costs associated with the acceptance of the cards. Consumers may be reminded of items they need while shopping or simply make additional purchases on impulse. As a result, consumers may purchase more items with payment cards than they would if paying cash.
POS vendors have responded to consumer preferences to use payment cards by offering merchants equipment that is designed to accept various types of payment cards and automate the processing of the transaction through a POS system and a transaction payment processing network. In many instances, the equipment includes a card reading device that accepts the card directly from the consumer and prints a receipt for the consumer upon completion of the transaction.
In the Petroleum/Convenience Store Industry, standard equipment includes a PC-based integrated POS application. This POS application links the indoor point-of-purchase devices and the outdoor pay-at-the-pump (automated fuel pumps) devices. This POS application allows the station or store operators to control all sales for the location in one application. For POS application indoor payment card transactions, one of two paths is typically followed. In one path, the cardholder presents his/her card to an operator. The operator swipes the card through a card reader that captures the magnetic “track” data on the card. The operator then enters the final amount of the transaction and processes the payment transaction. The second path is similar, but the cardholder swipes the card on a “PIN Pad” accessible to the cardholder. The operator then enters the final amount of the transaction and processes the payment transaction. In both types of transactions, the account data may be entered manually.
To use the POS application outdoors for a payment card transaction, the cardholder swipes the card through a card reader within the pay-at-the-pump device. The device captures the magnetic “track” data on the card. The normal flow then sends the payment transaction information to the integrated POS application. An authorization request is then sent to the transaction payment processing network. If the authorization is approved by the network, then the approved response is transmitted back to the integrated POS application and thus to the pay-at-the-pump device. The pump is then enabled and the cardholder selects a grade of fuel, inserts the nozzle, pumps the fuel, and returns the nozzle. When the pay-at-the-pump device senses that the nozzle has been returned, it prints a receipt for the cardholder and sends the final amount of the payment transaction to the integrated POS application and then to the network for settlement.
Although integrated POS applications are in widespread use today, they are typically limited to accepting only those cards that operate with the transaction payment processing network selected by the merchant. The devices at a particular store are configured to operate with a certain transaction payment processing network and therefore, accept and process only transactions that conform to the requirements of the selected transaction payment processing network. Transactions that do not conform to the requirements of the payment processing network cannot be processed through the fuel pump device. The inability to accept cards from other vendors or other types of cards at the fuel pump may result in lost business to the petroleum/convenience store merchant. Consumers that do not have the type of payment card accepted by the merchant are required to pay cash or pay by check for purchases. They may limit their purchases as a result or simply choose to frequent a different merchant.
Some attempts to accept other types of payment cards have been made. For example, the Mannatec® port that operates with Verifone® Ruby SuperSystem® POS system was designed to handle small issue/small volume proprietary cards, using a limited card format, with limited reasonability checks. An example of a small issue/small volume card is a “Metro Area Card” distributed to government workers of a 100K resident metro area. The government might sign an agreement with a local “ABC” service station to accept the Metro Area Card for all the municipal vehicles. This custom proprietary card may be accepted by the ABC station and related transactions processed out the secondary port to a local negative file containing account numbers of cards that should not be approved. All other transactions involving the Metro Area Card are approved and may result in the acceptance of fraudulent transactions. Use of the secondary port is typically limited to such types of cards and with very limited, local validation.
The inability to accept certain types of payment cards at many petroleum/convenience stores is disadvantageous to merchants and consumers. Therefore, there is a need for an integrated POS solution for petroleum/convenience store merchants that can accept cards and related transaction data for a secondary transaction payment processing network.